Published on April 14, 2013

http://www.cyprus-mail.com/anit-money-laundering/deloitte-officially-named-money-laundering-probe/20130414

DELOITTE Financial Advisory has been selected by the Central Bank of Cyprus (CBC) as the independent firm to evaluate the implementation of Cyprus’ Anti-Money Laundering (AML) framework, together with Moneyval of the Council of Europe.

Preliminary key findings are expected by April 20, while reports from Moneyval and the private auditor will be delivered to the CBC, the finance minister and the troika by April 24, when the €10 billion Cyprus bailout is expected to be signed.

International lenders will then report to the Eurogroup on the level of implementation of preventive measures by financial institutions, based on the findings of the two parallel reports by Moneyval and Deloitte.

Moneyval already completed its visit to Cyprus from March 19 to 31, and is now in the process of completing its report in accordance with its terms of reference. Deloitte is now in the process of carrying out their review.

According to a CBC announcement, Deloitte will carry out the review “in relation to the effective implementation of Customer Due Diligence (CDD) measures by a sample of major Cypriot banks with regards to deposits and loans”.

Deloitte Financial Advisory S.r.l. is an affiliate of Deloitte Italy S.p.A., the Italian member firm of Deloitte Touche Tohmatsu Limited.

The same announcement notes that Moneyval will focus on the effectiveness of anti-money laundering implementation while the independent auditor will look at the measures implemented by the credit institutions to prevent criminals from being the beneficial owners of customer deposits in, or loans from, Cypriot credit institutions. It will also present a report containing comments and conclusions with regard to both the overall credit sector’s and individual institutions’ level of compliance with the Cypriot legislation.

All credit institutions in Cyprus with a threshold of over €2 billion of total deposits by the end of 2012 will be included in the exercise.

Due to time constraints, the audit will not cover the adequacy of the internal systems in place in credit institutions to detect Money Laundering/Terrorist Financing (ML/TF), said the CBC.

The findings of the two reviews will not contain any confidential information and will only be shared within Moneyval, the auditor, the CBC and program partners (European Commission/ European Central Bank (ECB)/ International Monetary Fund).

An independent audit of Cyprus’ implementation of AML measures was set as a precondition of any international bailout of the country by its international lenders.

Allegations of Russian money laundering were a dime a dozen in the foreign- mostly German- media in the run-up to the Eurogroup decision last month which concluded on a Cyprus “bail-in” to trigger an international bailout.